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ASSOCIATION OF ACCOUNTING TECHNICIANS OF SRI LANKA

AA3 EXAMINATION - JULY 2015

(AA33) BUSINESS MANAGEMENT AND STRATEGY

02-08-2015
Afternoon
[2.00 5.00]

Instructions to candidates (Please Read Carefully):

(1)

Time: 03 hours.

(2)

Structure of Question Paper and the Marks Allocation:

Section
Requirement
A
All questions are compulsory.
B
All questions are compulsory.
C
Only two out of three questions should be answered.
Total Marks

No. of Pages
: 05
No. of Questions : 10

Marks
20
30
50
100

(3)

Answers should be in one language, in the medium applied for, in the booklets provided.

(4)

State clearly assumptions made by you, if any.

(5)

Action Verb Check List with definitions is attached. Each question will begin with an action verb.
Candidates should answer the questions based on the definition of the verb given in the Action Verb
Check List.

SECTION A
Four (04) compulsory questions
(Total 20 marks)

Question 01
Productivity, efficiency and effectiveness are three(03) important concepts of Management. Each of
these concepts are inter-related with each other.
Explain the relationship of the above three(03) concepts.

(05 marks)

Question 02
Behavioural Approach to Management has been introduced to eliminate the problems associated
with Classical Approach to Management to achieve sufficient production efficiency and work place
harmony. However, there were criticisms of Behavioural Approach too.
Explain three(03) criticisms of Behavioural Approach to Management.

(05 marks)

Question 03
It has been recognized that the success of an organization or any group within an organization
largely depends on the effectiveness of its leadership. Mainly there are three(03) theories of
leadership namely, Trait, Behavioural and Situational theories.
Explain how Trait Theory of Leadership could be applied in achieving organizational results in
challenging business situations.
(05 marks)

Question 04
Delegation of authority by superiors to subordinates is necessary for the efficient functioning of any
organization, since none of the superiors can personally accomplish or completely supervise all the
tasks of an organization.
Explain the need for delegation of authority for an organization.

(05 marks)

End of Section A

SECTION B
Three (03) compulsory questions
(Total 30 marks)

Question 05

Planning is the process of identifying an organizations objectives and formulating and monitoring
specific strategies to achieve those objectives. However, there are various barriers which destruct the
planning process.
Explain barriers towards effective planning and strategies to overcome those barriers.

(10 marks)

Question 06
Communication skills should be developed by any manager irrespective of his level of authority.
Specially, in modern environment, communication skill has become the primary skill for any manager.
Managers with good communication skills have become more successful in performing their roles in
organizations.
Explain four(04) types of communication skills that should be developed by managers and state how
managers can develop these communication skills.
(10 marks)
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Question 07
Controlling is an essential part of effective management in an organization, because non-availability
of a system of control may result in failing all the efforts.
Explain the sequential steps involved in the controlling process. Your explanation should be
supported by an appropriate diagram.
(10 marks)

End of Section B

SECTION C
Answer any two (02) questions only.
(Total 50 marks)

Question 08

(Total 25 marks)

ABC Ltd. is a manufacturing company. The employees of ABC Ltd. take pride in themselves on their
technical skills, current expertise and professional contacts outside the company. ABC Ltd. has only a
few rules and regulations and supervision is loose because management believes that their
employees are hardworking and trustworthy. Management is highly concerned about the high
productivity, therefore they believe that high productivity could be achieved only by treating its
people in the right manner. The company is proud of its reputation as being a good place to work.
At ABC Ltd., job activities are designed around work teams and team members are encouraged to
interact with each other across functions and authority levels. Managers are evaluated not only on
their departments performance but on how well their department coordinates its activities with
other departments in the organisation. Promotions and other valuable rewards go to employees who
make the greatest contributions to the organisation, even when those employees have strange ideas,
unusual personal behaviour or unconventional work habits. The company fills upper level positions
with the best people available, which sometimes include hiring people away from competitive
organizations. The company prides itself on being market-driven and rapidly responding to the
changing needs of its customers. Management of ABC Ltd. believes that its culture driven by
important values and beliefs has created a competitive advantage in the industry, which is mainly
governed by the way ABC Ltd. manages its people.
You are required to:
(a)

Analyse the organisational culture of ABC Ltd. according to Charles Handys model.

(10 marks)

(b)

Discuss how ABC Ltd.s business strategy is influenced by its culture.

(08 marks)

(c)

Assess how ABC Ltd. can use Motivation as a managerial factor.

(07 marks)
(Total 25 marks)

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Question 09
According to Mr. Peter, Managing Director of Pearson PLC, a mass scale company engaged in the
business of publishing and media, printed version of books would someday be outdated and it will
take a form of a file to be downloaded from the internet. Pearson PLC had to undergo a significant
change to be aligned with fast changing technology in the world and ever changing needs of
consumers. Not only big companies like Pearson PLC, but also small businesses, universities and
colleges and even governments are forced to significantly change the way they do things. In
transforming Pearson PLC, Mr. Peter also faced enormous challenges just as all others in the same
industry. While change has always been part of a managers job, it has become even more so in
recent years.
You are required to:
(a)

Explain the types of change available to consider when initiating changes in Pearson PLC.
(07 marks)

(b)

Discuss how Mr. Peter could overcome resistance to change.

(c)

Identify key stakeholders of Pearson PLC and discuss their influence on Pearson PLC. (10 marks)

(08 marks)

(Total 25 marks)

Question 10

Todays managers in many industries are working hard to match the competitive advantages of new
global rivals. They are moving manufacturing offshore in search of lower labour costs, rationalising
product lines to capture global economies of scale, instituting quality circles and just-in-time
production and adopting Japanese human resource practices. When competitiveness still seems out
of reach, they form strategic alliances often with very companies that upset the competitive balance
in the first place. Too many companies are spending enormous energy simply to reproduce the cost
and quality advantages of their global competitors already enjoy. Further, now it has become a trend
for todays businesses to spend more on Corporate Social Responsibility related activities.
You are required to:
(a)

Discuss the role of strategy in developing competitive advantage for an organisation. (08 marks)

(b)

Discuss the different types of corporate strategies that can be used by an organization and the
conditions under which those strategies are most appropriate to be used.
(09 marks)

(c)

Discuss the importance of Corporate Social Responsibility in todays business world. (08 marks)
(Total 25 marks)

End of Section C
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ACTION VERB CHECK LIST

Knowledge Process

Level 01
Comprehension
Recall & explain
important information

Knowledge Process

Level 02
Application

Verb List
Define

Describe exactly the nature, scope, or meaning.

Draw

Produce (a picture or diagram).

Identify

Recognize, establish or select after consideration.

List

Write the connected items one below the other.

Relate

To establish logical or causal connections.

State

Express something definitely or clearly.

Calculate/Compute Make a mathematical computation

Discuss

Examine in detail by argument showing different

aspects, for the purpose of arriving at a conclusion.

Explain

Make a clear description in detail revealing relevant

facts.

Interpret

Present in an understandable terms.

Recognize

To show validity or otherwise, using knowledge or

contextual experience.

Record

Enter relevant entries in detail.

Summarize

Give a brief statement of the main points (in facts or

figures).

Verb List

Put to practical use.

Assess

Determine the value, nature, ability, or quality.

Demonstrate

Prove, especially with examples.

Solve

Level 03
Analysis
Draw relations among
ideas and compare and
contrast / Solve openended problems.

Verb Definitions

Apply

Graph
Use knowledge in a setting
Prepare
other than the one in
which it was learned /
Prioritize
Solve closed-ended
Reconcile
problems

Knowledge Process

Verb Definitions

Verb List

Represent by means of a graph.

Make ready for a particular purpose.
Arrange or do in order of importance.
Make consistent with another.
To find a solution through calculations and/or
explanation.

Verb Definitions

Analyze

Examine in detail in order to determine the solution

or outcome.

Compare

Examine for the purpose of discovering similarities.

Contrast

Examine in order to show unlikeness or differences.

Differentiate

Constitute a difference that distinguishes something.

Outline

Make a summary of significant features.

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